The stock market rebounded last week, but came well off highs amid continued whipsaw action. President Donald Trump, citing “yippy” bond markets, on Wednesday announced he was scaling back higher tariffs for 90 days — except for China — triggering the best gains in years for the major indexes. But stocks fell back with tariffs and tariff uncertainty high. Long-term Treasury yields backed off highs but still had a big gain, reflecting and intensifying market unease.
Wells Fargo (WFC), JPMorgan Chase (JPM), and Delta Air Lines (DAL) all began their bank earnings with economic concerns, while Walmart (WMT) withdrew its guidance.Other health insurers, like UnitedHealth Group (UNH), jumped on increased Medicare Advantage payments. Despite an unexpected decline in consumer and producer prices, inflation expectations are rapidly rising.
Stock Market Has One Big Day
Due to the partial Trump tariff delay, the stock market surged on Wednesday, with the Nasdaq recording its second-highest percentage increase ever. Although tiny stocks closed the week lower, the larger indices recovered some of their gains and continued to rise sharply. As the U.S. dollar fell, Treasury yields increased, which is concerning for America’s long-standing reserve currency role as a safe haven.
Inflation Tame As Trade War Hits Demand
Unexpectedly, the March consumer price index decreased somewhat from February, lowering the 12-month CPI inflation rate from 2.8% in February to 2.4%. Core CPI inflation dropped to 2.8%, the lowest level in four years. However, falling hotel and flight prices, which reflected a decline in travel demand, were a major contributing cause. Amid concerns about a recession, falling energy costs caused the producer price index to unexpectedly drop by 0.4%, while the core PPI decreased by 0.1%. In contrast to predictions of a rebound, PPI inflation fell to 2.7% year over year and core PPI to 3.3%.
In the end, the probability of a Fed rate cut did not alter substantially since Fed officials expressed apprehension about acting before tariffs are resolved due to the potential impact on inflation. Consumer sentiment at the University of Michigan, however, plummeted much more than anticipated, plunging to a 45-year low. The one-year inflation estimate in the report jumped to 6.7%, the highest level since 1981.
Banks Cautious About Economy
As the banks announced their Q1 results on Friday, the CEOs of JPMorgan Chase (JPM), Wells Fargo (WFC), and BlackRock (BLK) made cautionary remarks regarding the year’s economic forecast. According to Jamie Dimon of JPMorgan, customers have grown “more cautious” as a result of the heightened market volatility brought on by trade and geopolitical issues. “The economy is facing considerable turbulence,” he continued, referring to trade conflicts, tariffs, deficits, sticky inflation, high asset prices, and volatility.
Deregulation and tax reform are possible advantages. Charlie Scharf of Wells Fargo stated that while he applauds President Trump’s readiness to examine obstacles to fair trade, such big steps come with risks. Although there is a lot of uncertainty, Wells anticipates ongoing volatility and is getting ready for a sluggish economic climate this year. According to Larry Fink of BlackRock, the United States may already be experiencing a recession. Bank of New York Mellon (BK) and JPMorgan exceeded Q1 projections. BlackRock and Wells Fargo missed revenue projections but outperformed earnings estimates.
TSMC Sales Positive For Chipmakers
Sales for the month of March and the entire first quarter were higher than anticipated, according to Taiwan Semiconductor Manufacturing (TSM), also referred to as TSMC. In Q1, TSMC’s sales increased 39% year over year. The announcement is encouraging for its clients, including Nvidia (NVDA), a pioneer in AI chips. In other news, the Trump administration has retracted its intentions to restrict Chinese sales of Nvidia’s H20 AI processor. Because more trade restrictions had been anticipated, analysts think that removes a cloud off Nvidia’s stock.
Health Insurers Get Big Win
Following a large increase in Medicare Advantage payments by the Centers for Medicare & Medicaid Services (CMS) late Monday, Humana (HUM), UnitedHealth Group (UNH), Aetna parent CVS Health (CVS), and other health insurers rose. The 5.06% rise planned by the Trump administration for fiscal 2026 is significantly greater than the 2.23% increase that CMS had suggested during the Biden Administration. With a three-year phase-in period until 2026, the Trump administration will continue to restrict specific billing methods.
Delta EPS Beats, But Growth ‘Stalled’
With a 2% EPS increase, Delta Air Lines (DAL) marginally outperformed lower Q1 estimates. Revenue increased 3% to $12.98 billion, yet it was still insufficient. However, the carrier reported lower Q2 guidance, stating that “growth has largely stalled” due to international trade uncertainty. In order to balance supply and demand, the airline intends to slow capacity expansion. Additionally, Delta withdrew their full-year projection due to “the lack of economic clarity.” During a turbulent week, delta increased.
Google Unveils New Chip At Cloud Event
Google parent company Alphabet (GOOGL) debuted new artificial intelligence services and a seventh-generation, in-house-developed processing chip at Cloud Next 2025. Additionally, Google said that enterprise clients will be able to access its worldwide communications network for the first time. Google stated that cloud users will be able to use the Ironwood chip, which is over ten times more powerful than its predecessor, by the end of 2025. It revised its intentions to provide accelerators from Nvidia (NVDA). Nvidia’s new Vera Rubin accelerators will be among the first made available by Google’s cloud division. Additionally, Google stated that its Gemini family of AI models will be available for use by clients using a distributed cloud platform to develop applications at their own internal data centers.
Stock Market News In Brief
BYD (BYDDF) reported first-quarter net income that was 86% greater than experts had predicted, up 119% from the previous year. That would be consistent with projections for Tesla’s net income at the upper end. The largest EV manufacturer in the world also introduced the Han L and Tang L, which are extremely competitively priced and include rapid charging as well as a Lidar-powered driver-assist system. The week saw a sharp increase in shares.
Walmart (WMT) withdrew its operational profit forecast for the first quarter due to uncertainty around tariffs. The retail behemoth had projected an adjusted operating income increase of 0.5% to 2%. In the quarter that concluded in April, revenues increased by 3% to 4%.
Revenue growth surged once again to 102%, while Cal-Maine (CALM) recorded a 246% spike. In the fiscal third quarter that concluded in February, egg costs skyrocketed due to bird flu and associated culling. However, both of those estimates were missing. The cost of eggs is beginning to decline. Friday midday saw a 2.8% increase in shares.
President Trump’s statement that Japan’s Nippon Steel should not acquire the “very special company” caused U.S. Steel (X) to plummet Thursday. Regarding the outcome of Nippon Steel’s bid for U.S. Steel, Trump had faltered.
